Private investment group Alchemy Partners yesterday confirmed widespread reports that it was considering making an offer for UK Coal.

Alchemy, the venture capitalist group headed by Jon Moulton, confirmed that it was involved in a takeover approach rejected by UK Coal last week.

It said investment fundholders that it advises were continuing to consider making an offer for the Doncasterbased group, and that it was inviting UK Coal's board to resume discussions.

Alchemy said in a statement: "There can be no certainty that any offer will be made and if made, there can be no certainty as to the terms of any such offer."

UK Coal, which owns seven deep mines in the UK including Daw Mill at Atherstone, said on June 8 that it had terminated talks with an unidentified party after two months.

It said the approach had been subject to pre-conditions and that "sufficient clarification" had not been received on a number of matters.

Alchemy said in its statement that it had requested a meeting with UK Coal's management to discuss the business plan for the mining operations, details of the pension fund and the latest independent valuation of the company's real estate assets. It said the company had declined the offer to meet.

It said fundholders advised by Alchemy would provide the equity financing of any new company necessary to make an offer for UK Coal. The other proposed equity funding suppliers were Morston Assets, the property management vehicle of Sir Tom Farmer and the Buccleuch Group.

It said the approach had been subject to a number of matters, including successful completion of a study of the firm's books.

UK Coal, formerly known as RJB Mining, acquired the former assets of British Coal when the coal industry was privatised.

The company's extensive property interests - valued at £174 million in 2002 - are likely to be one of the main reasons for the interest in a firm which in March unveiled losses of £51.6 million for its last financial year.

Chief executive Gerry Spindler is looking to lead the company back to profitability by 2006.